Question

1. Equilibrium in a market means which of the following?

o the point at which quantity supplied and quantity demanded are the same
o the point at which suppliers begin to reduce prices
o the point at which unsold goods begin to pile up
o the point at which prices fall below the cost of production

Answer 1

Market equilibrium refers to the point where the quantity supplied is equal to the quantity demanded, also known as the market clearing price. This condition indicates a balanced market with no surplus or shortage, and economic forces will drive the market towards this point if it is not already there.

Step-by-step explanation:

Equilibrium in a market means the point at which the quantity supplied and quantity demanded are the same. This equilibrium point is also known as the market clearing price, representing a state of balance where the products offered by suppliers are purchased by consumers with no surplus or shortage. This state of balance is an important concept in economics, as it reflects a scenario where resources are allocated efficiently and markets function optimally without wastage or unmet demand.

Equilibrium Price and Quantity

The equilibrium price is the price where the quantity demanded is equal to the quantity supplied, whereas the equilibrium quantity is the amount of goods or services traded at this price. When a market is not at equilibrium, economic forces work to move it towards the equilibrium point. Factors such as changes in demand, supply, and the availability of factors of production like labor and materials can shift the market towards or away from equilibrium.

Answer 2

the point at which quantity supplied and quantity demanded are the same

Step-by-step explanation:

Equilibrium in a market means the point at which quantity supplied and quantity demanded are the same. For a market to attain a state of equilibrium, the quantity of goods supplied should be equal to the quantity demanded to ensure there is neither demand nor supply surplus